Well, it’s Day 9 of the NHL lockout, and there remains a distinct lack of urgency from the league and the NHLPA.
Even with 61 preseason games (and probably 1 per cent of hockey-related revenues) already wiped out, Gary Bettman and Donald Fehr have had hardly any negotiating sessions, prolonging a stalemate that appears its headed for at least December.
So if they’re not going to sit down and hammer this thing out, we’ll have to step in and act as an impartial mediator by putting together a compromise for both sides.
(In case you haven’t seen it, the two proposals currently on the table are spelled out in detail here.)
Those offers put the two sides at least $1-billion apart depending on how league revenues grow over the coming years, but there is a deal to be had somewhere in the middle of all this.
And the answer to how to settle this thing is with a new agreement neither side is going to like all that much.
Step 1: Let the players keep the $1.87-billion they earned last season – and not a penny more.
The union’s offer comes with a 2 per cent raise in Year 1, but it’s become clear in negotiations that that’s just not going to fly.
And the league wants players to take a big pay cut via escrow next season that won’t work either.
The players have dug in on this one, and it’s really not too much to ask in Year 1 of the deal. If NHL revenues grow at 6.3 per cent (which is roughly what they’ve averaged the last eight years minus the effects of the Canadian dollar), that $1.87-billion will drop the players’ share to 53.6 per cent.
And it’ll slowly trail down from there.
Step 2: Allow the players small raises of 3 per cent annually between Years 2 and 5. That’s salary growth that should easily be outstripped by revenue growth.
Basically what that means is that if revenues grow at 6.3 per cent a year, the players’ share would decline from 53.6 per cent to 52.0, 50.4, 48.8 and 47.3 over the first five years of the agreement.
If they grow at a more modest 5 per cent, however, the players’ share will slide down to 50 per cent by the fifth year of the deal.
Either way, the owners would be rewarded handsomely for growing league revenues in this period, as they’ll keep everything beyond those modest raises.
Step 3: Leave the current three-year entry level contract system as is, but put a cap of $5-million average annual value on contracts during players’ fourth and fifth years in the league. And only players who get to the 600 games played mark or age 29 become unrestricted free agents.
This would help curtail some of the “second contract” issues currently occurring, where players like Taylor Hall and Tyler Seguin are signing behemoth extensions.
One solution is a system where players are given incentive to sign a two-year, $10-million “bridge” contract after their entry level one, setting them up for a bigger payday by Year 6 when everyone will have a much better idea of their true talent level and value.
Step 4: No more lifetime contracts. Put a reasonable cap on the length of a deal at somewhere between six and eight years.
This is one issue where the league is bang on in trying to find a fix, and one concession the players are going to have to live with to get a deal like this done.
There’s little point having a salary cap if half the league’s teams are able to circumvent it with massively front-loaded contracts that extend beyond players’ retirement dates.
Step 5: Make it a 10-year collective bargaining agreement. Play at a 50-50 revenue split for the final five years and never have a lockout again.
The last bit is the most important there.
My sense is this is the kind of deal both sides will hate, which is why it likely works as the middle ground.
The league is giving up some compromises here in guaranteeing the players will hold onto their current salaries and even get a little bit more. Bettman wants the share to ultimately settle below 50 per cent, and we haven’t given ownership that here.
The players, meanwhile, are giving up a lot of money (basically double what they’ve already offered) but are guaranteed to see their share rise from $1.87-billion to $2.1-billion over the next five years even as their percentage shrinks to between 47 and 50 per cent with even modest revenue growth.
With 6.3 per cent revenue growth a season, the league would save $120-million in Year 1 but more than $430-million in Year 5, with the deal improving for both sides over time.
Over the 10 years of an agreement like this, the owners could receive $3.2-billion more than in the current 57 per cent share system, in addition to the contract term limit, a new “second contract” provision and a slightly later free agency date.
If that’s not enough, then we’re all in big trouble.
And we’ll probably miss a full season.